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Immediate Action Required to Address IPAB Threat

In the push to repeal and replace the Patient Protection and Affordable Care Act (PPACA), the threat posed by one significant policy has flown under the radar: the Independent Payment Advisory Board (IPAB). Lawmakers should know that secondary stipulations in IPAB’s dormant provision are still very much in effect and could inflict significant harm on Medicare enrollees, even though its “trigger” hasn’t yet been pulled by the Centers for Medicare and Medicaid Services (CMS) Chief Actuary, it has not been funded, and has no appointees serving on the board.

PPACA created IPAB to recommend Medicare cost-savings in the event that outlays were projected to exceed the targeted growth rate. Restrictions against increasing beneficiary premiums, reducing benefits, increasing cost-sharing, or modifying eligibility requirements, severely limit cost-cutting options. This artificial bias against real, long-term reforms leaves only price-controls and care-rationing on the table.

A report is expected any day from the CMS Chief Actuary that could pull the trigger on IPAB, setting in motion a series of payment cuts for physicians, hospitals, and prescription drugs, perhaps as soon as this year. PPACA provides a fail-safe mechanism in the event the Board isn’t in place: it requires the Secretary of Health and Human Services to carry out the cuts, all with little oversight or accountability. The very same problems that generated bipartisan opposition to IPAB in the first place are still in force, regardless of whether a board or Administrator makes the call.

Congress has several vehicles it could use to address this looming problem, but it needs to move quickly.

All three bills above would fully and permanently repeal IPAB, and adhere to the regular legislative process. H.R. 849, introduced by Representative Roe (R-TN), has the distinction of 208 bipartisan cosponsors. S.J. Res. 17 and H.J. Res. 51 would both have the same effect, but do so by discontinuing the IPAB process and taking advantage of a fast-track legislative mechanism. This dual-approach is thanks to a unique opt-out, available only in 2017, in the underlying statute which provides for one-time, fast-track consideration of a narrow resolution to halt IPAB. A joint-resolution would require a three-fifths majority in both legislative bodies for passage and, most importantly, must be enacted by August 15, 2017.

Obamacare Repeal Process Concerns

Questions have been raised about how IPAB repeal might interact with the other legislative goal of repealing PPACA. It’s important to note that IPAB repeal is a wholly separate task: IPAB is not eligible for reconciliation. Though IPAB is a distinct issue from current PPACA repeal plans, the need to address IPAB is just as urgent. When considered independently, IPAB repeal is an opportunity for bipartisan cooperation, and lawmakers shouldn’t let other PPACA-related efforts delay action.

Medicare Sustainability

It’s important to acknowledge that Medicare faces profound fiscal challenges. The 2016 Trustee’s report indicated that spending is expected to once again grow, that unfunded liabilities could top $40 trillion, and that due to low reimbursement and payment rates, Medicare consumers already have challenges obtaining physician and hospital care. These problems need to be addressed - not just in the long-term - they need to be addressed now. However, IPAB is not the proper way to do so. The board lacks essential accountability and the few cost-saving solutions it’s afforded could have dire consequences for consumers. At the same time, given the dismal state of Medicare’s finances, even the most aggressive cuts to physician fees or prescription benefits, will do little to alleviate the long-term outlook, which promises to consume an ever-larger portion of our GDP. Comprehensive, innovative reforms are needed to ensure the long-term sustainability of Medicare, as well as avoid economic disaster. The longer Congress postpones these tough decisions, the harder those choices will be.

Take Action

Looking ahead toward August, Congress has an extremely crowded legislative calendar with numerous “must pass” items. Still, the “IPAB problem” has been on the horizon for years, and taxpayers expect their legislators to make the time for such a critical issue. Acting within the August 15 window provides the fastest, surest path to repeal and avoids unnecessary delay. Members should act quickly to endorse IPAB repeal legislation and resolutions, urge the committees of jurisdiction to move these bills forward, and work to secure a timely path to passage.

To that end, NTU is pleased to endorse the “Protecting Seniors’ Access to Medicare Act of 2017” (S. 260 /H.R. 849); the “Protecting Medicare from Executive Action Act of 2017” (S. 251); and both S.J. Res. 17/H.J. Res. 51.

In addition, NTU commends Senators Cornyn (R-TX) and Wyden (D-OR), as well as Representative Roe for their leadership on this critical issue.

Sincerely,

Nan SwiftFederal Affairs Manager

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National Taxpayers Union (NTU) is the Voice of America's Taxpayers. NTU mobilizes elected officials and the general public on behalf of tax relief and reform, lower and less wasteful spending, individual liberty, and free enterprise. Founded in 1969, we work at all levels for the day when every taxpaying citizen's right to a limited government is among our nation's highest democratic principles.